International Taxation: No peace for evaders
HM Revenues & Customs proposals for sanctions against tax evasion, the BEPS project and Islamic finance have been the highlights of the week at Del Canto Chambers.
International finance has led the way this week at Del Canto Chambers. We have analysed the emerging sector of Islamic finance, the BEPS (Base Erosion and Profit Shifting) project, the opportunities that Gibraltar offers in the field of Family Offices and the new measures proposed by the British Treasury against tax fraudsters, among others.
Our Managing Partner, Leon Fernando del Canto, was subsequently published an article in Spanish daily business and finance title, “Cinco Días”, focusing on Islamic finance and the investment opportunity it represents for Spain. For Del Canto, access to the assets of the entities that offer these investment products (such as sukuk -bonds- or sukuk takaful –insurances-) would mean an economic boost for the country and a possible increase in exports. The development of ethical banking and the cultural benefits with the Arab world (Gulf countries like Qatar, mainly) are other advantages which are highlighted.
On the other hand, HM Revenue & Customs has put together a proposal for measures to be introduced against tax evaders. Amongst other things, it increases fines by up to 100% of the amount defrauded for lawyers, tax consultants and bankers who participate in or facilitate tax evasion in tax optimization operations. In addition, HM Revenue & Customs intends to impose severe sanctions on natural and legal persons who hinder investigations against fraud.
The latter initiative has created major controversy because, as pointed out by the Chartered Institute of Taxation, it could in some cases reverse the burden of proof on the crime of tax evasion and place more risk on industry professionals working on processes of tax optimization which are perfectly legal.
We are not forgetting the international fight against tax fraud, with the third instalment of our series of articles dedicated to the BEPS project which aims to “combat tax evasion and double exemption, focusing on measures such as limiting the deductibility of interests and departure taxes”. We explain how to properly deduct the costs of surplus debt and the rate of departure taxes when companies move assets and capital abroad.
For the UK, Gibraltar is a great business platform with the rest of Europe for the Family Office sector. These entities for asset management give access to a flexible, modern and robust tax system which is advantageous when it comes to issues such as VAT or corporate tax. This legal framework would enhance the implementation of Family Offices in this British territory.
Finally, according to Wealth-X agency, the number of “billionaires” (those with assets valued at over a billion dollars) has grown globally in 2015 by 6.4% to a total of 2,473 people. These millionaires are referred to in the financial industry as High-Net-Worth Individuals (HNWI). This growth portends good prospects for the asset management sector.
These were the issues on taxation which we have found particularly interesting this week at Del Canto Chambers. We look forward to continuing to offer our readers our insights into international tax and commercial law. See you in the next seven days.
Xavier Nova (@xavinova) Director of Del Canto Chambers